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Socially excessive dissemination of patent licences

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  • Anthony Creane

Abstract

Compared with the social optimum, a monopolist usually sells too little. This result seemingly includes the case of a lab that licences its patented cost innovation: Katz and Shapiro (1986) find `conditions under which [the lab] will issue fewer than the socially optimal number of licences.' However, I find instead that its incentives can be socially too high; the monopoly seller may sell too much. For example, it can be profit maximizing to sell several licences, while it is socially optimal that none is sold.

Suggested Citation

  • Anthony Creane, 2009. "Socially excessive dissemination of patent licences," Canadian Journal of Economics, Canadian Economics Association, vol. 42(4), pages 1578-1598, November.
    • Handle: RePEc:cje:issued:v:42:y:2009:i:4:p:1578-1598
    DOI: 10.1111/j.1540-5982.2009.01559.x
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    References listed on IDEAS

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    Cited by:

    1. Seifert, Jacob, 2013. "Compulsory Licensing, Innovation and Welfare," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79778, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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